Legalize / United Kingdom / Public General Act

Finance Act 2010

Type Public General Act

Publication 2010-04-08

Last updated 2023-07-11

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

Part 1 — Charges, rates etc

Income tax

Charge, main rates, thresholds and allowances etc for 2010-11

1

(1) Income tax is charged for the tax year 2010-11.

(2) For that tax year—

(a) the basic rate is 20%,

(b) the higher rate is 40%, and

(3) The amounts specified in the following provisions of ITA 2007 are the same for the tax year 2010-11 as for the tax year 2009-10—

(a) sections 10(5) and 12(3) (basic rate limit and starting rate limit for savings),

(b) sections 35, 36(1), 37(1) and 38(1) (personal allowances and blind person's allowance),

(d) sections 36(2), 37(2), 45(4) and 46(4) (adjusted net income limit).

Corporation tax

Charge and main rate for financial year 2011

2

(1) Corporation tax is charged for the financial year 2011.

(2) For that year the rate of corporation tax is—

(a) 26% on profits of companies other than ring fence profits, and

(b) 30% on ring fence profits of companies.

(3) In subsection (2) “ring fence profits” has the same meaning as in Part 8 of CTA 2010 (see section 276 of that Act).

Rates of air passenger duty

3

(1) For the financial year 2010 the small profits rate is—

(a) 21% on profits of companies other than ring fence profits, and

(b) 19% on ring fence profits of companies.

(2) For the purposes of Part 3 of CTA 2010, for that year—

(a) the standard fraction is 7/400ths, and

(b) the ring fence fraction is 11/400ths.

(3) In subsection (1) “ring fence profits” has the same meaning as in Part 8 of CTA 2010 (see section 276 of that Act).

Capital gains tax

Unauthorised unit trusts

4

(1) In section 169N(3) of TCGA 1992 (limit on entrepreneurs' relief)—

(a) for “£1 million” (in both places) substitute “ £2 million ”, and

(b) in paragraph (b), after “total of” insert “ so much of ” and insert at the end “ as was subject to reduction under subsection (2) ”.

(2) The amendments made by subsection (1) have effect in relation to qualifying business disposals occurring on or after 6 April 2010.

Capital allowances

Annual investment allowance

5

(1) In section 51A(5) of CAA 2001 (entitlement to annual investment allowance: maximum allowance), for “£50,000” substitute “ £100,000 ”.

(2) The amendment made by subsection (1) has effect in relation to expenditure incurred on or after the relevant date.

(3) Subsections (4) and (5) apply in relation to a chargeable period (“the actual chargeable period”) which—

(a) begins before the relevant date, and

(b) ends on or after that date.

(4) The maximum allowance under section 51A of CAA 2001 for the actual chargeable period is the sum of each maximum allowance that would be found if—

(a) the period beginning with the first day of the chargeable period and ending with the day before the relevant date, and

(b) the period beginning with the relevant date and ending with the last day of the chargeable period,

were treated as separate chargeable periods.

(5) But, so far as concerns expenditure incurred before the relevant date, the maximum allowance under section 51A of that Act for the actual chargeable period is to be calculated as if the amendment made by subsection (1) had not been made.

(6) In this section “the relevant date” means—

(a) for corporation tax purposes, 1 April 2010, and

(b) for income tax purposes, 6 April 2010.

Stamp duty land tax

Relief for first-time buyers

6

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Rate in respect of residential property where consideration over £1m

7

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) The amendment made by subsection (1) has effect in relation to any land transaction of which the effective date is on or after 6 April 2011.

(3) But that amendment does not have effect in relation to any transaction—

(a) effected in pursuance of a contract entered into and substantially performed before 25 March 2010, or

(b) effected in pursuance of a contract entered into before that date and not excluded by subsection (4).

(4) A transaction effected in pursuance of a contract entered into before 25 March 2010 is excluded by this subsection if—

(a) there is any variation of the contract, or assignment (or assignation) of rights under the contract, on or after 25 March 2010,

(b) the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or

(c) on or after that date there is an assignment (or assignation), subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.

Inheritance tax

Rate bands

8

(1) The Table substituted in Schedule 1 to IHTA 1984 by section 155(1)(b) and (4) of FA 2006 (which provides for a rate of nil per cent on such portion of the value concerned as does not exceed £325,000 and a rate of 40 per cent on such portion as exceeds that amount) has effect in relation to chargeable transfers made on or after 6 April 2010.

(2) Accordingly, omit—

(a) in IHTA 1984, the Table substituted in Schedule 1 in relation to chargeable transfers made on or after that date (which provided for a rate of nil per cent on such portion of the value concerned as does not exceed £350,000 and a rate of 40 per cent on such portion as exceeds that amount), and

(b) in FA 2007, section 4 (which substituted it).

(3) Section 8 of IHTA 1984 (indexation) does not have effect by virtue of any difference between the retail prices index for the month of September in 2010, 2011, 2012 or 2013 and the previous September.

Alcohol and tobacco

Rates of alcoholic liquor duties

9

(1) ALDA 1979 is amended as follows.

(2) In section 5 (rate of duty on spirits), for “£22.64” substitute “ £23.80 ”.

(3) In section 36(1AA)(a) (standard rate of duty on beer), for “£16.47” substitute “ £17.32 ”.

(4) In section 62(1A) (rates of duty on cider)—

(a) in paragraph (a) (rate of duty per hectolitre in the case of sparkling cider of a strength exceeding 5.5 per cent), for “£207.20” substitute “ £217.83 ”,

(b) in paragraph (b) (rate of duty per hectolitre in the case of cider of a strength exceeding 7.5 per cent which is not sparkling cider), for “£47.77” substitute “ £54.04 ”, and

(5) In section 62(1A) (as amended by subsection (4))—

(a) in paragraph (b), for “£54.04” substitute “ £50.22 ”, and

(b) in paragraph (c), for “£36.01” substitute “ £33.46 ”.

(6) For the table in Schedule 1 substitute—

TABLE OF RATES OF DUTY ON WINE AND MADE-WINE

Description of wine or made-wine	Rates of duty per hectolitre £
Wine or made-wine of a strength not exceeding 4 per cent	69.32
Wine or made-wine of a strength exceeding 4 per cent but not exceeding 5.5 per cent	95.33
Wine or made-wine of a strength exceeding 5.5 per cent but not exceeding 15 per cent and not being sparkling	225.00
Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent but less than 8.5 per cent	217.83
Sparkling wine or sparkling made-wine of a strength of 8.5 per cent or of a strength exceeding 8.5 per cent but not exceeding 15 per cent	288.20
Wine or made-wine of a strength exceeding 15 per cent but not exceeding 22 per cent	299.97
Description of wine or made-wine	Rates of duty per litre of alcohol in wine or made-wine £
---	---
Wine or made-wine of a strength exceeding 22 per cent	23.80

(7) The amendments made by subsections (2) to (4) and (6) are treated as having come into force on 29 March 2010.

(8) The amendments made by subsection (5) come into force on 30 June 2010.

Rates of tobacco products duty

10

(1) For the table in Schedule 1 to TPDA 1979 substitute—

1. Cigarettes	An amount equal to 24 per cent of the retail price plus £119.03 per thousand cigarettes
2. Cigars	£180.28 per kilogram
3. Hand-rolling tobacco	£129.59 per kilogram
4. Other smoking tobacco and chewing tobacco	£79.26 per kilogram

(2) The amendment made by subsection (1) is treated as having come into force at 6 pm on 24 March 2010.

Vehicle excise duty

Rates for motorcycles

11

(1) In paragraph 2(1) of Schedule 1 to VERA 1994 (annual rates of duty: motorcycles)—

(a) in paragraph (c) (motorbicycle which has engine with cylinder capacity exceeding 400cc but not exceeding 600cc), for “£48” substitute “ £50 ”, and

(b) in paragraph (d) (motorcycle not within any of paragraphs (a) to (c)), for “£66” substitute “ £70 ”.

(2) The amendments made by subsection (1) have effect in relation to licences taken out on or after 1 April 2010.

Fuel duties

Fuel duties: rates and rebates from April 2010

12

(1) HODA 1979 is amended as follows.

(2) In section 6(1A) (main rates)—

(a) in paragraph (a) (unleaded petrol), for “£0.5619” substitute “ £0.5719 ”,

(b) in paragraph (aa) (aviation gasoline), for “£0.3457” substitute “ £0.3835 ”,

(c) in paragraph (b) (light oil other than unleaded petrol or aviation gasoline), for “£0.6591” substitute “ £0.6691 ”, and

(d) in paragraph (c) (heavy oil), for “£0.5619” substitute “ £0.5719 ”.

(3) In section 6AA(3) (rate of duty on biodiesel), for “shall be £0.3619 a litre” substitute “ is the same as that in the case of heavy oil ”.

(4) In section 6AB (rate of duty on bioblend)—

(a) in subsection (3), for the words after “is the” substitute “ same as that in the case of heavy oil. ”, and

(b) omit subsections (4) and (5).

(5) In section 6AD(3) (rate of duty on bioethanol), for “shall be £0.3619 a litre.” substitute “ is the same as that in the case of unleaded petrol. ”

(6) In section 6AE (rate of duty on blends of bioethanol and hydrocarbon oil)—

(a) in subsection (3), for the words after “bioethanol blend” substitute “ is the same as that in the case of unleaded petrol. ”, and

(b) omit subsections (4) and (5).

(7) In section 8(3) (road fuel gas)—

(a) in paragraph (a) (natural road fuel gas), for “£0.2216” substitute “ £0.2360 ”, and

(b) in paragraph (b) (other road fuel gas), for “£0.2767” substitute “ £0.3053 ”.

(8) In section 11(1) (rebate on heavy oil)—

(a) in paragraph (a) (fuel oil), for “£0.1037” substitute “ £0.1055 ”, and

(b) in paragraph (b) (gas oil), for “£0.1080” substitute “ £0.1099 ”.

(9) In section 14(1) (rebate on light oil for use as furnace fuel), for “£0.1037” substitute “ £0.1055 ”.

(10) In section 14A(2) (rebate on certain biodiesel), for “£0.1080” substitute “ £0.1099 ”.

(11) The following are revoked—

(a) the Hydrocarbon Oil Duties (Hydrogenation of Biomass) (Reliefs) Regulations 2006 (S.I. 2006/3426),

(b) the Hydrocarbon Oil Duties (Sulphur-free Diesel) (Hydrogenation of Biomass) (Reliefs) (Amendment) Regulations 2007 (S.I. 2007/2406), and

(c) regulation 11 of the Hydrocarbon Oil, Biofuels and Other Fuel Substitutes (Determination of Composition of a Substance and Miscellaneous Amendments) Regulations 2008 (S.I. 2008/753).

(12) The amendments made by this section are treated as having come into force on 1 April 2010.

Fuel duties: further changes in rates and rebates

13

(1) HODA 1979 is amended as follows.

(2) In section 6(1A) (main rates)—

(a) in paragraph (a) (unleaded petrol)—

(i) on 1 October 2010, for “£0.5719” substitute “ £0.5819 ”, and

(ii) on 1 January 2011, for “£0.5819” substitute “ £0.5895 ”,

(b) in paragraph (b) (light oil other than unleaded petrol or aviation gasoline)—

(i) on 1 October 2010, for “£0.6691” substitute “ £0.6791 ”, and

(ii) on 1 January 2011, for “£0.6791” substitute “ £0.6867 ”, and

(i) on 1 October 2010, for “£0.5719” substitute “ £0.5819 ”, and

(ii) on 1 January 2011, for “£0.5819” substitute “ £0.5895 ”.

(3) In section 8(3) (road fuel gas)—

(a) in paragraph (a) (natural road fuel gas)—

(i) on 1 October 2010, for “£0.2360” substitute “ £0.2505 ”, and

(ii) on 1 January 2011, for “£0.2505” substitute “ £0.2615 ”, and

(b) in paragraph (b) (other road fuel gas)—

(i) on 1 October 2010, for “£0.3053” substitute “ £0.3195 ”, and

(ii) on 1 January 2011, for “£0.3195” substitute “ £0.3304 ”.

(4) In section 11(1) (rebate on heavy oil)—

(a) in paragraph (a) (fuel oil)—

(i) on 1 October 2010, for “£0.1055” substitute “ £0.1074 ”, and

(ii) on 1 January 2011, for “£0.1074” substitute “ £0.1088 ”, and

(b) in paragraph (b) (gas oil)—

(i) on 1 October 2010, for “£0.1099” substitute “ £0.1118 ”, and

(ii) on 1 January 2011, for “£0.1118” substitute “ £0.1133 ”.

(5) In section 14(1) (rebate on light oil for use as furnace fuel)

(a) on 1 October 2010, for “£0.1055” substitute “ £0.1074 ”, and

(b) on 1 January 2011, for “£0.1074” substitute “ £0.1088 ”.

(6) In section 14A(2) (rebate on certain biodiesel)—

(a) on 1 October 2010, for “£0.1099” substitute “ £0.1118 ”, and

(b) on 1 January 2011, for “£0.1118” substitute “ £0.1133 ”.

Other environmental taxes

Rates of air passenger duty

14

(1) In section 30 of FA 1994 (air passenger duty: rates)—

(a) in subsection (2) (journeys ending in UK or Part 1 territory), for “£11” substitute “ £12 ” and for “£22” substitute “ £24 ”,

(b) in subsection (3) (journeys ending in Part 2 territory), for “£45” substitute “ £60 ” and for “£90” substitute “ £120 ”,

(c) in subsection (4) (journeys ending in Part 3 territory), for “£50” substitute “ £75 ” and for “£100” substitute “ £150 ”, and

(d) in subsection (4A) (other journeys), for “£55” substitute “ £85 ” and for “£110” substitute “ £170 ”.

(2) The amendments made by subsection (1) have effect in relation to the carriage of passengers beginning on or after 1 November 2010.

Standard rate of landfill tax

15

(1) In section 42(1) and (2) of FA 1996 (standard amount of landfill tax), for “£48” substitute “ £56 ”.

(2) The amendments made by subsection (1) have effect in relation to disposals made (or treated as made) on or after 1 April 2011.

Rate of aggregates levy

16

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Rates of climate change levy

17

(1) In Schedule 6 to FA 2000 (climate change levy), for the table in paragraph 42(1) substitute—

Taxable commodity supplied	Rate at which levy payable if supply is not a reduced-rate supply
Electricity	£0.00485 per kilowatt hour
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility	£0.00169 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state	£0.01083 per kilogram
Any other taxable commodity	£0.01321 per kilogram

(2) The amendment made by subsection (1) has effect in relation to supplies treated as taking place on or after 1 April 2011.

Climate change levy: reduced-rate supplies

18

(1) In Schedule 6 to FA 2000 (climate change levy), in paragraph 42(1)(c) (reduced-rate supplies), for “20 per cent.” substitute “ 35 per cent. ”.

(2) The amendment made by subsection (1) has effect in relation to supplies treated as taking place on or after 1 April 2011.

Gambling

Rate of bingo duty

19

(1) In section 17(1)(b) of BGDA 1981 (bingo duty chargeable at 22 per cent of bingo promotion profits), for “22” substitute “ 20 ”.

(2) The amendment made by subsection (1) has effect in relation to accounting periods beginning on or after 29 March 2010.

Rates of gaming duty

20

(1) In section 11(2) of FA 1997 (rates of gaming duty), for the table substitute—

Part of gross gaming yield	Rate
The first £1,975,000	15 per cent
The next £1,361,500	20 per cent
The next £2,385,000	30 per cent
The next £5,033,500	40 per cent
The remainder	50 per cent

(2) The amendment made by subsection (1) has effect in relation to accounting periods beginning on or after 1 April 2010.

Amusement machine licence duty

21

(1) In section 23(2) of BGDA 1981 (amount of duty payable on amusement machine licence), for the table substitute—

Months for which licence granted	Category A £	Category B1 £	Category B2 £	Category B3 £	Category B4 £	Category C £
1	520	265	210	210	190	85
2	1015	505	395	395	360	150
3	1520	760	605	605	545	225
4	2025	1015	800	800	725	300
5	2540	1270	1000	1000	900	375
6	3050	1520	1195	1195	1085	450
7	3555	1775	1395	1395	1265	520
8	4060	2025	1600	1600	1450	600
9	4570	2285	1800	1800	1630	675
10	5075	2540	1995	1995	1810	750
11	5580	2795	2195	2195	1990	820
12	5805	2905	2285	2285	2075	860

(2) The amendment made by subsection (1) has effect in relation to cases where the application for the amusement machine licence is received by the Commissioners for Her Majesty's Revenue and Customs after 4 pm on 26 March 2010.

New taxes

Bank payroll tax

22

Schedule 1 contains provision for and in connection with bank payroll tax.

Pensions: high income excess relief charge

23

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Part 2 — Anti-avoidance and revenue protection

Losses, capital allowances etc

Sideways relief etc

24

Schedule 3 contains provision about sideways relief etc.

Property loss relief

25

(1) Chapter 4 of Part 4 of ITA 2007 (losses from property businesses) is amended as follows.

(2) In section 117 (overview of Chapter), after subsection (2) insert—

(3) This Chapter also contains provision restricting relief under this Chapter (see section 127A).

(3) In section 120 (deduction of property losses from general income), after subsection (6) insert—

(7) See also section 127A (no relief for tax-generated losses attributable to annual investment allowance).

(4) After section 127 insert—

(127A) (1) This section applies if— (a) in a tax year a person makes a loss in a UK property business or overseas property business (whether carried on alone or in partnership), (b) the loss has a capital allowances connection (see section 123(2)), and (c) the loss arises directly or indirectly in consequence of, or otherwise in connection with, relevant tax avoidance arrangements. (2) No property loss relief against general income may be given to the person for so much of the applicable amount of the loss as is attributable to an annual investment allowance. (3) For the purposes of subsection (2), the applicable amount of the loss is to be treated as attributable to capital allowances before anything else and to an annual investment allowance before any other capital allowance. (4) In subsection (1) “relevant tax avoidance arrangements” means arrangements— (a) to which the person is a party, and (b) the main purpose, or one of the main purposes, of which is being in a position to make use of an annual investment allowance in the obtaining of a reduction in tax liability by means of property loss relief against general income. (5) In subsection (4) “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable). (6) In this section “the applicable amount of the loss” has the meaning given by section 122.

(5) The amendments made by this section have effect in relation to a loss if it arises directly or indirectly in consequence of, or otherwise in connection with—

(a) arrangements which are entered into on or after 24 March 2010, or

(b) any transaction forming part of arrangements which is entered into on or after that date.

(6) But those amendments do not have effect where the arrangements are, or any such transaction is, entered into pursuant to an unconditional obligation in a contract made before that date.

(7) “An unconditional obligation” means an obligation which may not be varied or extinguished by the exercise of a right (whether or not under the contract).

Capital allowance buying

26

Schedule 4 contains provisions about capital allowance buying.

Leased assets

27

Schedule 5 contains provisions about leased assets.

Cushion gas

28

(1) Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.

(2) Section 70J (meaning of “funding lease”) is amended as follows.

(3) After subsection (1) insert—

(1A) A plant or machinery lease is also a “funding lease” if the plant or machinery is cushion gas.

(4) In subsection (2), for “Subsection (1) is” substitute “ Subsections (1) and (1A) are ”.

(5) After subsection (6) insert—

(7) In this section “cushion gas” means gas that functions or is intended to function as plant in a particular gas storage facility.

(6) In section 104A(1) (special rate expenditure)—

(a) omit the “and” at the end of paragraph (d), and

(b) after paragraph (e) insert

and (f) expenditure incurred on or after 1 April 2010 on the provision of cushion gas (within the meaning given by section 70J(7)).

(7) After section 104F insert—

(104G) (1) This section applies if expenditure incurred by a person on the provision of cushion gas used in a particular gas storage facility includes both new expenditure and old expenditure. (2) Any disposal event which concerns any of that cushion gas is to be treated for the purposes of this Part as relating to cushion gas which is the subject of the new expenditure before cushion gas which is the subject of the old expenditure. (3) The result of subsection (2) (including any further application of that subsection) is that a disposal event may be treated as relating— (a) only to cushion gas which is the subject of the new expenditure, (b) both to— (i) cushion gas which is the subject of the new expenditure, and (ii) cushion gas which is the subject of the old expenditure, or (c) only to cushion gas which is the subject of the old expenditure. (4) If a disposal event is treated, as a result of subsection (2), as relating both to— (a) cushion gas which is the subject of the new expenditure, and (b) cushion gas which is the subject of the old expenditure, it is to be treated for the purposes of this Part as two separate disposal events, the first relating to cushion gas within paragraph (a) and the second relating to cushion gas within paragraph (b). (5) In this section— - “cushion gas” has the meaning given by section 70J(7), - “new expenditure” means expenditure incurred on or after 1 April 2010, and - “old expenditure” means expenditure incurred before that date.

(8) The amendments made by subsections (2) to (5) have effect in relation to leases whose inception (within the meaning given by section 70YI(1) of CAA 2001) is on or after 1 April 2010.

(9) The amendments made by subsection (6) have effect in relation to expenditure incurred on or after 1 April 2010.

(10) The amendment made by subsection (7) has effect in relation to disposal events on or after 1 April 2010.

Sale of lessors: consortium relationships

29

(1) Chapters 3 and 4 of Part 9 of CTA 2010 (sales of lessors) are amended as follows.

(2) In section 393(7) (qualifying 75% subsidiaries), omit “or 90%”.

(3) In section 394 (consortium relationships)—

(a) in subsections (1)(b), (4) and (5)(b), for “90%” substitute “ 75% ”, and

(b) in subsection (9)(b), omit “or 90%”.

(4) In section 398 (qualifying 75% or 90% subsidiary), omit—

(a) subsections (5) and (6), and

(b) in subsection (7)(b), “and “90% subsidiary””,

and, in the heading, omit “or 90%”.

(5) In section 405(2)(b) and (6) (adjustments to basic amount), for “90%” substitute “ 75% ”.

(6) In sections 408(5)(b) and 430(4)(b) (associated company), for “90%” substitute “ 75% ”.

(7) In Schedule 4 to CTA 2010, omit the entry relating to “qualifying 90% subsidiary (in Chapters 3 to 6 of Part 9)”.

(8) The amendments made by this section have effect where the relevant day is on or after 9 December 2009.

(9) Corresponding amendments, having effect where the relevant day is on or after that date, are to be treated as having been made in Schedule 10 to FA 2006.

Charities etc

Charities and community amateur sports clubs: definitions

30

Schedule 6 contains provision about the meaning of “charity” (and related expressions) and “community amateur sports club”.

Gifts of shares etc to charities

31

Schedule 7 contains provision about schemes to obtain or increase relief in respect of certain gifts to charities.

Miscellaneous amendments

32

Schedule 8 contains miscellaneous amendments of provisions relating to charities.

Remittance basis

“Relevant person”

33

(1) Section 809M of ITA 2007 (remittance basis: meaning of “relevant person”) is amended as follows.

(2) In subsection (2)(f), insert at the end “ or a company which is a 51% subsidiary of such a company, ”.

(3) In subsection (3)(ca), for “Act),” substitute “ Act) and, in relation to a company that would be a close company if it were resident in the United Kingdom, means a person who would be such a participator if it were a close company, ”.

(4) The amendments made by this section are treated as having come into force on 6 April 2010.

Foreign currency bank accounts

34

Schedule 9 contains provision about foreign currency bank accounts.

Other international matters

Penalties: offshore income etc

35

(1) Schedule 10 contains provision about penalties in respect of offshore income etc.

(2) Schedule 10 comes into force on such day as the Treasury may by order appoint.

(3) An order under subsection (2)—

(a) may make different provision for different purposes, and

(b) may include transitional provisions and savings.

(4) The Treasury may by order make any incidental, supplemental, consequential, transitional or transitory provision or saving that appears appropriate in consequence of, or otherwise in connection with, Schedule 10.

(5) An order under subsection (4) may—

(a) make different provision for different purposes, and

(b) make provision amending, repealing or revoking an enactment or instrument (whenever passed or made).

(6) An order under this section is to be made by statutory instrument.

(7) A statutory instrument containing an order under subsection (4) is subject to annulment in pursuance of a resolution of the House of Commons.

Reliefs and reductions for foreign tax

36

Schedule 11 contains provision about activities designed to increase the amount allowed by way of credit or reduction in respect of foreign tax.

Asset transfer to non-resident company: recovery of postponed charge

37

(1) In section 140 of TCGA 1992 (postponement of charge on transfer of assets to non-resident company)—

(a) in subsection (4), for “the consideration received by it on the disposal shall be treated as increased by” substitute “ there shall be deemed to accrue to the transferor company as a chargeable gain on that occasion ”, and

(b) after that subsection insert—

(4A) A chargeable gain which is deemed to accrue under subsection (4) is in addition to any gain or loss that actually accrues to the transferor company on the disposal of the securities.

(2) In Schedule 7AC to that Act (exemption for disposals by companies with substantial shareholding), omit paragraph 35 (recovery of charge postponed on transfer of asset to non-resident company).

(3) The amendments made by this section have effect in relation to disposals of securities on or after 6 January 2010.

Securities etc

Transactions in securities

38

Schedule 12 contains provision about transactions in securities.

Approved CSOP schemes: eligible shares

39

(1) In Part 4 of Schedule 4 to ITEPA 2003 (shares to which approved CSOP schemes can apply), omit paragraph 17(1)(c) (shares in a company which is under the control of a listed company).

(2) Accordingly, in that Schedule—

(a) in paragraph 17—

(i) after sub-paragraph (1)(a) insert “ or ”,

(ii) omit “or” at the end of sub-paragraph (1)(b), and

(iii) omit sub-paragraph (2), and

(b) omit paragraph 20(3)(c) (and the “or” before it).

(3) The amendments made by this section—

(a) come into force on 24 September 2010, and

(b) have effect in relation to options granted on or after that day.

(4) If—

(a) during the period beginning with 24 March 2010 and ending with 23 September 2010 (“the transitional period”), a share option is granted to an individual in accordance with the provisions of an approved CSOP scheme, and

(b) the shares which may be acquired by the exercise of the option are shares in a company which is under the control of a listed company, other than shares of a class listed on a recognised stock exchange,

the share option is to be treated for the purposes of the CSOP code as not having been granted in accordance with the provisions of an approved CSOP scheme.

(5) An alteration made to a scheme during the transitional period in order to meet the amended paragraph 17 requirement is to be regarded as an alteration made in a key feature of the scheme for the purposes of paragraph 30 of Schedule 4 to ITEPA 2003 (withdrawal of approval).

(6) Where the amended paragraph 17 requirement is not met in respect of an approved CSOP scheme at the end of the transitional period, the requirement is to be treated for the purposes of paragraph 30(2)(a) of that Schedule (disqualifying events) as ceasing to be met immediately after that time.

(7) Where, by virtue of subsection (6), approval is withdrawn from a scheme under Part 7 of that Schedule, that withdrawal has effect (from the time determined in accordance with paragraph 30(1) of that Schedule) in relation to options granted on or after 24 September 2010 only.

(8) In subsections (3) to (7) references to options having been granted include new share options granted under the terms of a provision included in a scheme under paragraph 26 of Schedule 4 to ITEPA 2003 (exchange of shares on company reorganisation); but paragraph 27(5) of that Schedule (new share options treated as granted at same time as old share options) does not apply for the purposes of those subsections.

(9) In this section—

“the amended paragraph 17 requirement” means the requirement of paragraph 17 of Schedule 4 to ITEPA 2003 as amended by this section;

“approved” and “CSOP scheme” have the meaning given by section 521 of that Act;

“control” and “listed company” have the same meaning as in paragraph 17 of Schedule 4 to that Act.

Unauthorised unit trusts

40

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Index-linked gilt-edged securities

41

Schedule 14 contains provision about index-linked gilt-edged securities.

42

(1) Paragraph 84(1) of Schedule 2 to ITEPA 2003 (approved share incentive plans) is amended as follows.

(2) For paragraph (d) substitute—

(d) an alteration being made— (i) in the share capital of a company any of whose shares are subject to the plan trust, or (ii) in the rights attaching to any shares of such a company, that materially affects the value of shares that are subject to the plan trust;

(3) In paragraph (e), for “have been awarded to participants” substitute “ are subject to the plan trust ”.

(4) Section 989 of CTA 2009 (deduction for contribution to plan trust) is amended as follows.

(5) In subsection (1), after paragraph (a) insert—

(aa) the payment is not made pursuant to tax avoidance arrangements,

(6) After subsection (6) insert—

(6A) For the purposes of this section the payment mentioned in subsection (1)(a) is made pursuant to tax avoidance arrangements if— (a) it is made pursuant to arrangements entered into by the paying company, and (b) the main purpose, or one of the main purposes, of the paying company in entering into the arrangements was to obtain a deduction or an increased deduction. (6B) In subsection (6A) “arrangements” includes any arrangements, scheme or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions.

(7) The amendments made by subsections (1) to (3) have effect in relation to events taking place on or after 24 March 2010.

(8) The amendments made by subsections (4) to (6) have effect in relation to payments made on or after that day.

Loan relationships and derivative contracts

Close companies: release of loans to participators etc

43

(1) In CTA 2009, after section 321 insert—

(321A) (1) This section applies if— (a) a loan gives rise to a charge to tax under section 455 of CTA 2010 (including a charge by virtue of section 459 or 460 of that Act), and (b) the whole or a part of the debt in respect of the loan is released or written off. (2) No debit is to be brought into account for the purposes of this Part in respect of the release or writing off.

(2) The amendment made by subsection (1) has effect in relation to debts (or parts of debts) released or written off on or after 24 March 2010.

Connected companies: releases of debts

44

Schedule 15 contains provision about releases of debts in cases involving connected companies.

Relationships treated as loan relationships etc: repos

45

(1) In paragraph 4 of Schedule 13 to FA 2007 (ignoring effect on borrower of sale of securities), in sub-paragraph (4) omit the “and” at the end of paragraph (a) and after that paragraph insert—

(aa) an amount representative of income payable in respect of the securities is not to be ignored as a result of sub-paragraph (3)(b) if it is, in accordance with generally accepted accounting practice, so recognised or taken into account, and

(2) In section 550 of CTA 2009 (ignoring effect on borrower of sale of securities)—

(a) in subsection (4), for “and (6)” substitute “ to (6) ”, and

(b) after subsection (5) insert—

(5A) For the purposes of the charge to corporation tax, an amount representative of income payable in respect of the securities is not to be ignored as a result of subsection (3)(b) if— (a) it is, in accordance with generally accepted accounting practice, recognised in determining the borrower's profit or loss for that or any other period, or (b) it is taken into account in calculating the amounts which are so recognised.

(3) The amendments made by this section are treated as always having had effect.

Risk transfer schemes

46

Schedule 16 contains provision about risk transfer schemes.

Insurance companies

Apportionment of asset value increases

47

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pensions

Extension of special annual allowance charge

48

(1) Schedule 35 to FA 2009 (special annual allowance charge) is amended as follows.

(2) In paragraph 1(2) (high-income individual)—

(a) in the first sentence, for “£150,000” substitute “ £130,000 ”, and

(b) insert at the end—

Paragraph 16A makes special provision about cases in which the individual's relevant income for the tax year 2009-10 is less than £150,000.

(3) In paragraph 2 (calculation of relevant income)—

(a) in the last sentence of sub-paragraph (1),

(b) in sub-paragraph (2) (in each place), and

for “£150,000” substitute “ £130,000 ”.

(4) After sub-paragraph (5) of that paragraph insert—

(5A) If— (a) the individual's relevant income for the tax year (whether that is the tax year 2009-10 or a later tax year) would (apart from this sub-paragraph) be less than £130,000 if the reference in sub-paragraph (5) to a scheme made on or after 22 April 2009 were to a scheme made on or after 9 December 2009, and (b) the individual's relevant income for the tax year 2009-10 is less than £150,000, the individual's relevant income for the tax year is to be assumed to be less than £130,000.

(5) In paragraph 11(3)(b), after “22 April” insert “ 2009 ”.

(6) After paragraph 16 insert—

(16A) If the result is £150,000 or more for either or both of those earlier tax years the individual's relevant income for the tax year 2009-10 is to be assumed for the purposes of sub-paragraph (1) to be £150,000. (1) This paragraph has effect if the individual's relevant income for the tax year 2009-10 is less than £150,000. (2) References in this Schedule to a pre-22 April 2009 pension input amount are to a pre-9 December 2009 pension input amount. (3) References in this Schedule to noon on 22 April 2009 are to 9 December 2009. (4) Other references in this Schedule to 22 April 2009 (except in paragraph 2) are to 9 December 2009. (5) The reference in paragraph 16(2) to 21 April 2009 is to 8 December 2009. (6) If the amount arrived at in the case of the individual under sub-paragraph (1) of paragraph 2 for the tax year 2009-10 is less than £150,000, take the steps in that sub-paragraph in relation to the tax year 2007-08 and the tax year 2008-09. (7) If there is a scheme the main purpose, or one of the main purposes, of which is to secure that the individual's relevant income for the tax year 2009-10 is less than £150,000, it is to be assumed for the purposes of sub-paragraph (1) to be £150,000.

(7) The amendments made by this section have effect for the tax year 2009-10 and subsequent tax years (but see paragraph 21(2) of Schedule 35 to FA 2009).

Information

49

In section 251(5) of FA 2004 (persons who can be required to provide information to scheme administrators etc), after paragraph (a) insert—

(aa) employers of members of a registered pension scheme,

Value added tax and insurance premium tax

Extension of reverse charge provisions to supplies of services

50

(1) In section 55A of VATA 1994 (customers to account for tax on supplies of goods of a kind used in missing trader intra-community fraud), after “goods” (in each place, including the heading) insert “ or services ”.

(2) In paragraph 2(3B) of Schedule 11 to that Act (power to require notifications relating to supplies to which section 55A(6) applies), after “goods” insert “ or services ”.

Insurance premium tax: separate contracts

51

(1) Part 3 of FA 1994 (insurance premium tax) is amended as follows.

(2) Section 72 (meaning of “premium”) is amended as follows.

(3) After subsection (1A) insert—

(1AA) A contract (“the relevant contract”) is not to be regarded as a separate contract for the purposes of subsection (1A) above if conditions A to D are met. (1AB) Condition A is that the insured is an individual (“I”) and enters into the taxable insurance contract in a personal capacity. (1AC) Condition B is that I— (a) is required to enter into the relevant contract by, or as a condition of entering into, the taxable insurance contract, or (b) would be unlikely to enter into the relevant contract without also entering into the taxable insurance contract. (1AD) Condition C is that— (a) the amount charged to I under the relevant contract in respect of any particular services is not open to negotiation by I, or (b) the other terms on which particular services are to be provided to I under the relevant contract are not open to such negotiation. (1AE) Condition D is that the amount charged to I under the taxable insurance contract is arrived at without a comprehensive assessment having been undertaken of the individual circumstances of I which might affect the level of risk.

(4) After subsection (9) insert—

(9A) Provision may be made by order amending subsections (1AA) to (1AE) above.

(5) In section 74(4) and (6) (orders which need to be approved by House of Commons), for “or 71” substitute “ , 71 or 72 ”.

(6) The amendment made by subsection (3) has effect in relation to payments made on or after 24 March 2010.

Inheritance tax

Reversionary interests of purchaser or settlor etc in relevant property

52

(1) In IHTA 1984, after section 81 insert—

(81A) (1) Where a reversionary interest in relevant property to which— (a) a person who acquired it for a consideration in money or money's worth, or (b) the settlor or the spouse or civil partner of the settlor, (a “relevant reversioner”) is beneficially entitled comes to an end by reason of the relevant reversioner becoming entitled to an interest in possession in the relevant property, the relevant reversioner is to be treated as having made a disposition of the reversionary interest at that time. (2) A transfer of value of a reversionary interest in relevant property to which a relevant reversioner is beneficially entitled is to be taken to be a transfer which is not a potentially exempt transfer.

(2) The amendment made by subsection (1) has effect in relation to reversionary interests to which a relevant reversioner becomes beneficially entitled on or after 9 December 2009.

Interests in possession

53

(1) IHTA 1984 is amended as follows.

(2) In section 3A (potentially exempt transfers)—

(a) in subsection (6), omit “other than section 52”, and

(b) after that subsection insert—

(6A) The reference in subsection (6) above to any provision of this Act does not include section 52 below except where the transfer of value treated as made by that section is one treated as made on the coming to an end of an interest which falls within section 5(1B) below.

(3) In section 5 (meaning of estate)—

(a) in subsection (1)(a)(ii), after “below” insert “ unless it falls within subsection (1B) below ”, and

(b) after subsection (1A) insert—

(1B) An interest in possession falls within this subsection if the person— (a) was domiciled in the United Kingdom on becoming beneficially entitled to it, and (b) became beneficially entitled to it by virtue of a disposition which was prevented from being a transfer of value by section 10 below.

(4) In—

(a) section 49(1A) (treatment of interests in possession),

(b) section 51(1A) (disposal of interest in possession), and

insert at the end (not as part of paragraph (c))—

or falls within section 5(1B) above.

(5) In section 57A(1A) (relief where property enters maintenance fund), insert at the end (not as part of paragraph (c))—

or fell within section 5(1B) above.

(6) In section 100(1A) (alterations of capital etc where participators are trustees), insert at the end (not as part of paragraph (c))—

or falls within section 5(1B) above.

(7) In section 101(1A) (companies' interests in settled property), insert at the end (not as part of paragraph (b))—

or falls within section 5(1B) above.

(8) In section 102ZA(1)(b)(ii) of FA 1986 (gifts with reservation: termination of interests in possession), after “serial interest” insert “ or falls within section 5(1B) of the 1984 Act ”.

(9) In F(No.2)A 1987, omit section 96(2)(c).

(10) The amendments made by this section have effect in relation to an interest in possession to which a person is beneficially entitled if the person becomes beneficially entitled to it on or after 9 December 2009.

Stamp taxes

SDRT: depositary receipt systems and clearance services systems

54

(1) Part 4 of FA 1986 (stamp duty reserve tax) is amended as follows.

(2) In section 95(1) (depositary receipts: exceptions), before “there shall be” insert “ subject to section 97C, ”.

(3) In section 97(1) (clearance services: exceptions), before “there shall be” insert “ subject to section 97C, ”.

(4) In section 97B (transfer between depositary receipt system and clearance system), after subsection (1) insert—

(1A) Subsection (1) is subject to section 97C.

(5) After that section insert—

(97C) (1) This section applies where arrangements are made in accordance with which chargeable securities are— (a) issued to an EU system, and (b) subsequently transferred from an EU system to a non-EU system. (2) Nothing in section 95(1), 97(1) or 97B(1) disapplies a charge to tax under section 93 or 96 in respect of that transfer if— (a) the chargeable securities have not previously been transferred, or (b) where they have previously been transferred, the transfer (or, if more than one, each of them) was an exempt transfer. (3) For the purposes of subsection (1)(a) chargeable securities are issued to an EU system if— (a) pursuant to an arrangement of the kind mentioned in section 93(1), they are issued to a nominee in respect of an EU depositary receipt issuer, or (b) pursuant to an arrangement of the kind mentioned in section 96(1), they are issued to a nominee in respect of an EU clearance service operator. (4) For the purposes of subsection (1)(b)— (a) a transfer is from an EU system if it is from a company which is incorporated under the law of a member State and at the time of the transfer falls within section 67(6) or 70(6), and (b) a transfer is to a non-EU system if it is to a company which is not incorporated under the law of a member State and at the time of the transfer falls within section 67(6) or 70(6). (5) In this section— - “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable); - “EU clearance service operator” means a person— 1. whose business is or includes the provision of clearance services for the purchase and sale of chargeable securities, and 2. who— 1. if it is a company, is incorporated under the law of a member State, and 2. in any other case, is resident in a member State; - “EU depositary receipt issuer” means a person— 1. whose business is or includes issuing depositary receipts for chargeable securities, and 2. who— 1. if it is a company, is incorporated under the law of a member State, and 2. in any other case, is resident in a member State; - “exempt transfer” means a transfer in respect of which, by reason of section 90(5), 95(1), 97(1) or 97B(1), no charge to stamp duty reserve tax arises; - “nominee”— 1. in respect of an EU clearance service operator, means a person whose business is or includes holding chargeable securities as nominee for the EU clearance service operator, and 2. in respect of an EU depositary receipt issuer, means a person whose business is or includes holding chargeable securities as nominee or agent for the EU depositary receipt issuer.

(6) The amendments made by this section have effect in relation to transfers of chargeable securities on or after 1 October 2009.

SDLT: partnerships

55

(1) In section 75C of FA 2003 (SDLT anti-avoidance: supplemental)—

(a) in subsection (8), omit paragraph (b) (and the “and” before it), and

(b) after that subsection insert—

(8A) Nothing in Part 3 of Schedule 15 applies to the notional transaction under section 75A.

(2) The amendments made by subsection (1) have effect in relation to any notional transaction of which the effective date is on or after 24 March 2010.

(3) But those amendments do not have effect in relation to a notional transaction if any scheme transaction is—

(a) completed before that date,

(b) effected in pursuance of a contract entered into and substantially performed before that date, or

(4) A scheme transaction effected in pursuance of a contract entered into before 24 March 2010 is excluded by this subsection if—

(a) there is any variation of the contract, or assignment (or assignation) of rights under the contract, on or after 24 March 2010,

(b) the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or

(c) it is a land transaction and on or after that date there is an assignment (or assignation), subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.

Administration

Disclosure of tax avoidance schemes

56

Schedule 17 contains amendments of the provisions relating to the disclosure of tax avoidance schemes.

Opening of postal packets

57

(1) Section 106 of the Postal Services Act 2000 (power to detain postal packets containing contraband) is amended as follows.

(2) In subsection (4), for paragraphs (a) and (b) substitute “ in the presence of a representative of the postal operator ”.

(3) Omit subsection (5).

(4) In subsection (7)(b), omit “if he is absent”.

Part 3 — Other provisions

Income tax: benefits in kind

Zero and low emission vehicles

58

(1) Chapter 6 of Part 3 of ITEPA 2003 (taxable benefits: cars, vans and related benefits) is amended as follows.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) Omit subsection (5A).

(7) Section 140 (cars first registered in 1998 or later without emissions figure) is amended as follows.

(8) In subsection (3), for the words after “year is” substitute—

(a) the special percentage if the car cannot in any circumstances emit CO₂ by being driven, and (b) 35% in any other case.

(9) After that subsection insert—

(3A) The special percentage is— (a) for the tax years 2010-11 to 2014-15, 0%, and (b) for the tax year 2015-16 and subsequent tax years, 9%.

(10) Omit subsection (4).

(11) In section 149(4) (car fuel benefit), for “for an electrically propelled vehicle” substitute “ or any energy for a car which cannot in any circumstances emit CO₂ by being driven. ”

(12) In section 155 (vans), for subsections (1) to (3) substitute—

(1) The cash equivalent of the benefit of a van for a tax year is— (a) nil in a case to which subsection (2) applies, and (b) £3,000 in any other case. (2) This subsection applies if— (a) the restricted private use condition is met in relation to the van for the tax year, or (b) the van cannot in any circumstances emit CO₂ by being driven and the tax year is any of the tax years 2010-11 to 2014-15.

(13) In—

(a) section 156(1) (reduction for periods when van unavailable), and

(b) section 158(1) (reduction for payments for private use),

for “155(2)(a) or (b)” substitute “ 155(1) ”.

(14) In section 160 (van fuel benefit)—

(a) in subsection (1), for “155(2)(b)” substitute “ 155(1)(b) ”, and

(b) omit subsection (4).

(15) In section 170(1A) (power to amend section 155(2)(a) and (3)(b))—

(a) in paragraph (a), for “155(2)(a)” substitute “ 155(1)(a) ” and after “employee” insert “ or a zero-emission van ”, and

(b) in paragraph (b), for “155(3)(b)” substitute “ 155(1)(b) ”.

(16) In FA 2006, in section 59, omit subsection (7).

(17) In FA 2009, in Schedule 28, omit paragraph 7.

(18) The amendments made by subsections (2) to (16) have effect for the tax year 2010-11 and subsequent tax years.

(19) The amendment made by subsection (17) is treated as always having had effect.

(20) The amendment of section 142 of ITEPA 2003 made by paragraph 8 of Schedule 28 to FA 2009 has effect for the tax year 2010-11 (as well as for the tax year 2011-12 and subsequent tax years).

Cars with CO2 emissions figure

59

(1) Chapter 6 of Part 3 of ITEPA 2003 (taxable benefits: cars, vans and related benefits) is further amended as follows.

(2) For section 139 substitute—

(139) (1) The appropriate percentage for a year for a car with a CO₂ emissions figure depends on the car's CO₂ emissions figure. (2) If the car's CO₂ emissions figure is less than the relevant threshold for the year, the appropriate percentage for the year is— (a) if the year is 2012-13, 2013-14 or 2014-15 and the car's CO₂ emissions figure for the year does not exceed 75 grams per kilometre driven, 5%, and (b) otherwise, 10%. (3) If the car's CO₂ emissions figure is equal to the relevant threshold for the year, the appropriate percentage for the year is 11% (“the threshold percentage”). (4) If the car's CO₂ emissions figure exceeds the relevant threshold for the year, the appropriate percentage for the year is whichever is the lesser of— (a) the threshold percentage increased by one percentage point for each 5 grams per kilometre driven by which the CO₂ emissions figure exceeds the relevant threshold for the year, and (b) 35%. (5) The relevant threshold is 100 grams per kilometre driven. (6) If the car's CO₂ emissions figure is not a multiple of 5, it is to be rounded down to the nearest multiple of 5 for the purposes of subsections (3) and (4)(a). (7) This section is subject to— (a) section 141 (diesel cars), and (b) any regulations made by the Treasury under section 170(4) (power to reduce the appropriate percentage).

(3) In section 170 (Treasury orders and regulations varying various amounts)—

(a) omit subsection (2A) (power to vary limit in section 139(3A)), and

(b) in subsection (3)—

(i) for “ “lower” substitute “ “ relevant ”,

(ii) for “the Table in section 139(4)” substitute “ section 139(5) ”, and

(iii) for “2006” substitute “ 2013 ”.

(4) In consequence of the amendments made by subsections (2) and (3), omit—

(a) in FA 2006, section 59,

(b) in FA 2009, in Schedule 28, paragraphs 6, 9 and 10(1), and

(5) The amendments made by this section have effect for the tax year 2012-13 and subsequent tax years.

Subsidised meals for employees: salary sacrifice etc

60

(1) Section 317 of ITEPA 2003 (exemption from income tax in respect of provision for employees by employer of free or subsidised meals) is amended as follows.

(2) In subsection (1), for “C” substitute “ D ”.

(3) After subsection (4) insert—

(4A) Condition D is that the provision is not pursuant to— (a) relevant salary sacrifice arrangements, or (b) relevant flexible remuneration arrangements.

(4) After subsection (5) insert—

(5A) In this section— - “relevant salary sacrifice arrangements” means arrangements (whenever made, whether before or after the employment began) under which the employee gives up the right to receive an amount of general earnings or specific employment income in return for the provision of free or subsidised meals; - “relevant flexible remuneration arrangements” means arrangements (whenever made, whether before or after the employment began) under which the employee and employer agree that the employee is to be provided with free or subsidised meals rather than receive some other description of employment income.

(5) The amendments made by this section have effect for the tax year 2011-12 and subsequent tax years.

Corporation tax

Sale of lessors: election out of charge

61

Schedule 18 contains provision amending Chapter 3 of Part 9 of CTA 2010 (and corresponding earlier provision) to introduce a system for electing out of the charge on a qualifying change.

Accounting standards: loan relationships and derivative contracts

62

Schedule 19 contains provision conferring powers on the Treasury to make regulations about cases where, in consequence of a change in accounting standards in relation to loan relationships or derivative contracts, there is a change in the way in which a company is permitted or required for accounting purposes to recognise amounts.

Miscellaneous

Champions League final

63

Schedule 20 contains provision exempting certain persons from income tax in respect of certain income arising in connection with the 2011 Champions League final.

FSCS intervention in relation to insurance contracts

64

(1) The Treasury may by regulations make provision for and in connection with the application of the relevant taxes in relation to circumstances in which there is relevant intervention under the FSCS.

(2) “Relevant intervention” means—

(a) anything done under, or while seeking to make, arrangements for securing continuity of insurance in connection with protected contracts of insurance,

(b) anything done as part of measures for safeguarding policyholders in connection with protected contracts of insurance, or

(3) In this section—

“the FSCS” means the Financial Services Compensation Scheme (established under Part 15 of FISMA 2000);

“protected contracts of insurance” has the same meaning as in the PRA Handbook made by the Prudential Regulation Authority under that Act as it has effect from time to time.

(4) The provision that may be made by regulations under this section includes provision imposing any of the relevant taxes (as well as provisions for exemptions or reliefs).

(5) The relevant taxes are—

(a) income tax,

(b) capital gains tax,

(d) inheritance tax,

(e) stamp duty land tax,

(f) stamp duty,

(g) stamp duty reserve tax, and

(h) insurance premium tax.

(6) Regulations under this section may include provision having effect in relation to any time before they are made if the provision does not increase any person's liability to tax.

(7) The provision made by regulations under this section may be framed as provision modifying, or applying with appropriate modifications, provisions having effect in relation to protected contracts of insurance.

(8) Regulations under this section may, in particular—

(a) amend, repeal or revoke or otherwise modify any enactment or instrument (whenever passed or made),

(b) make different provision for different cases or otherwise for different purposes, and

(9) Regulations under this section are to be made by statutory instrument.

(10) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons.

Stamp duty and SDRT: clearing houses

65

(1) In sections 116(1)(b) and 117(1)(b) of FA 1991 (investment exchanges and clearing houses: stamp duty and SDRT), for the words after “description) of such an exchange” substitute “ or clearing house, or a nominee (or nominee of a prescribed description) of a member of such an exchange or clearing house, and ”.

(2) The amendments made by subsection (1) are treated as always having had effect.

Alcoholic liquor duties: power to amend definition of “cider”

66

In section 1 of ALDA 1979 (dutiable alcoholic liquors), after subsection (6) insert—

(6A) The Treasury may by order made by statutory instrument amend subsection (6) above. (6B) An order under subsection (6A) above may make— (a) consequential amendments in this Act or any other enactment, (b) other consequential provision, and (c) supplementary, incidental and transitional provision. (6C) A statutory instrument containing an order under subsection (6A) above is to be laid before the House of Commons after being made; and, unless it is approved by that House before the end of the period of 28 days beginning with the date on which it is made, ceases to have effect at the end of that period (but without that affecting anything previously done under it or the making of a new order). (6D) In reckoning that period no account is to be taken of any time— (a) during which Parliament is dissolved or prorogued, or (b) during which the House of Commons is adjourned for more than 4 days.

Climate change levy: compatible state aid

67

In paragraph 42 of Schedule 6 to FA 2000 (amount payable by way of levy), after sub-paragraph (2) insert—

(3) If a reduced-rate supply is part of an aid scheme within Article 25 of Commission Regulation (EC) No. 800/2008, sub-paragraph (4) cites the title and publication reference of that Regulation for the purpose of complying with Article 3(1) of that Regulation. (4) That citation is Commission Regulation (EC) No. 800/2008 of 6 August 2008 declaring certain categories of aid compatible with the common market in application of Articles 87 and 88 of the Treaty (General block exemption Regulation) (O.J. 2008 No. L214/3) (with the reference to Articles 87 and 88 being read, as a result of the Treaty of Lisbon, as a reference to Articles 107 and 108 of the Treaty on the Functioning of the European Union).

Pensions: minor corrections

68

(1) Section 280(2) of FA 2004 (Part 4: index) is amended as follows.

(2) After the definition of “active membership period (in sections 221 to 223)” insert—

additional rate	section 6(2) of ITA 2007 (as applied by section 989 of that Act)

(3) In the definition of “basic rate limit”, for “20(2)” substitute “ 10 ”.

(4) After the entry relating to “higher rate” insert—

higher rate limit	section 10 of ITA 2007

(5) The amendments made by subsections (2) and (4) have effect for the tax year 2010-11 and subsequent tax years.

(6) The amendment made by subsection (3) has effect for the tax year 2008-09 and subsequent tax years.

Final provisions

Interpretation

69

(1) In this Act—

“ALDA 1979” means the Alcoholic Liquor Duties Act 1979;

“BGDA 1981” means the Betting and Gaming Duties Act 1981;

“CAA 2001” means the Capital Allowances Act 2001;

“CTA 2009” means the Corporation Tax Act 2009;

“CTA 2010” means the Corporation Tax Act 2010;

“FISMA 2000” means the Financial Services and Markets Act 2000;

“HODA 1979” means the Hydrocarbon Oil Duties Act 1979;

“ICTA” means the Income and Corporation Taxes Act 1988;

“IHTA 1984” means the Inheritance Tax Act 1984;

“ITA 2007” means the Income Tax Act 2007;

“ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003;

“ITTOIA 2005” means the Income Tax (Trading and Other Income) Act 2005;

“TCGA 1992” means the Taxation of Chargeable Gains Act 1992;

“TIOPA 2010” means the Taxation (International and Other Provisions) Act 2010;

“TMA 1970” means the Taxes Management Act 1970;

“TPDA 1979” means the Tobacco Products Duty Act 1979;

“VATA 1994” means the Value Added Tax Act 1994;

“VERA 1994” means the Vehicle Excise and Registration Act 1994.

(2) In this Act—

“FA”, followed by a year, means the Finance Act of that year;

“F(No.2)A”, followed by a year, means the Finance (No.2) Act of that year.

Short title

70

This Act may be cited as the Finance Act 2010.

SCHEDULE 1

Part 1 — The tax

The tax

1

(1) This Schedule makes provision for taxable companies to be charged to a tax to be known as “bank payroll tax”.

(2) Bank payroll tax is chargeable on the aggregate of the amounts of chargeable relevant remuneration awarded during the chargeable period to or in respect of relevant banking employees of a taxable company by reason of their employment as relevant banking employees.

(3) Relevant remuneration awarded during the chargeable period to or in respect of a relevant banking employee of a taxable company by reason of the employee's employment as a relevant banking employee is “chargeable” relevant remuneration only if and to the extent that its amount exceeds £25,000.

Rate

2

Bank payroll tax is charged at the rate of 50%.

“Taxable company”

3

“Taxable company” means a company which—

(a) is a UK resident bank or a relevant foreign bank,

(b) is a company not within paragraph (a) which is a member of a banking group and—

(i) is a UK resident investment company or a UK resident financial trading company, or

(ii) is a relevant foreign financial trading company, or

(c) is a building society or is a UK resident investment company, or a UK resident financial trading company, which is a member of the same group as a building society.

“Relevant remuneration”

4

(1) “Relevant remuneration”, in relation to a relevant banking employee of a taxable company, means anything that—

(a) constitutes earnings (within the meaning of section 62 of ITEPA 2003) in relation to the employee's employment by the taxable company as a relevant banking employee, or

(b) while not constituting earnings, constitutes a benefit provided by reason of that employment.

(2) Whether or not the relevant banking employee is chargeable to income tax in respect of anything is irrelevant in determining whether or not it is relevant remuneration.

(3) Excluded remuneration is not relevant remuneration.

“Excluded remuneration”

5

(1) “Excluded remuneration” means—

(a) anything which is regular salary or wages or a regular benefit,

(b) anything in the case of which a contractual obligation to pay or provide it to or in respect of the employee concerned arose before the beginning of the chargeable period,

(d) any share option granted under an approved SAYE option scheme (within the meaning of section 516 of that Act).

(2) In sub-paragraph (1)(a) “regular”, in relation to salary or wages or a benefit, means so much of the amount of the salary or wages or benefit as cannot vary according to—

(a) the performance of, or of any part of—

(i) any business of the taxable company concerned, or

(ii) any business of a person connected with the taxable company,

(b) the contribution made by the employee concerned to the performance of, or of any part of, any business within paragraph (a)(i) or (ii),

(d) any similar considerations.

(3) For the purposes of sub-paragraph (1)(b) a contractual obligation to pay or provide something to or in respect of the employee does not arise until—

(a) the amount to be paid or provided is fixed or is capable of becoming fixed without the exercise of discretion by any person, or

(b) the total amount of things to be paid or provided to or in respect of a number of employees including the employee is fixed or is capable of becoming fixed without the exercise of discretion by any person.

(4) A contractual obligation to pay or provide something is taken to arise for those purposes even if payment or provision of it is dependent on compliance by the employee with any conditions.

“Awarded”

6

(1) Relevant remuneration is “awarded” during the chargeable period if—

(a) a contractual obligation to pay or provide it arises during the chargeable period, or

(b) the relevant remuneration is paid or provided during the chargeable period without any such obligation having arisen during the chargeable period,

but subject to sub-paragraph (3).

(2) Sub-paragraph (3)(a) of paragraph 5 applies for the purposes of sub-paragraph (1) as for the purposes of sub-paragraph (1)(b) of that paragraph.

(3) Relevant remuneration is not to be taken to be awarded during the chargeable period by virtue of sub-paragraph (1)(a) if—

(a) it is required to be paid or provided at intervals,

(b) it is to be paid or provided in respect of contribution, performance or similar considerations only for times after the end of the chargeable period, and

(c) the reduction or elimination of a liability to bank payroll tax is not the main purpose or one of the main purposes of any person in assuming the obligation to pay or provide it.

(4) Sub-paragraph (4) of paragraph 5 applies for the purposes of this paragraph as for the purposes of sub-paragraph (1)(b) of that paragraph.

“Amount” of remuneration

7

(1) Subject to sub-paragraphs (2) to (4), the amount of any relevant remuneration is—

(a) if it is money, its amount when awarded,

(b) if it is money's worth, the amount of the money's worth when awarded, or

(2) Where relevant remuneration is awarded to or in respect of an employee by virtue of paragraph 6(1)(a) and its amount is not fixed when it is awarded, its amount is such as it is reasonable at that time to assume would be its amount (in accordance with sub-paragraph (1)) if and when paid or provided.

(3) Where the market value of any relevant remuneration at the time it is awarded exceeds, or would exceed, what would otherwise be its amount, its amount is that market value.

(4) Where anything constituting relevant remuneration is or would be, when awarded, subject to any restriction or restrictions, the restriction is, or restrictions are, to be ignored in arriving at its amount.

(5) For this purpose “restriction” means any condition, restriction or other similar provision which causes the value of the relevant remuneration to be less than it otherwise would be.

“The chargeable period”

8

“The chargeable period” is the period—

(a) beginning at 12.30 pm on 9 December 2009, and

(b) ending with 5 April 2010.

“Relevant banking employee”

9

(1) An employee of a taxable company is a relevant banking employee of the taxable company if—

(a) the employment in which the employee is employed by the taxable company is a banking employment, and

(b) either—

(i) the employee is resident in the United Kingdom in the tax year 2009-10, or

(ii) the duties of the banking employment are at any time in that tax year performed wholly or partly in the United Kingdom.

(2) “Banking employment” means an employment the duties of which are wholly or mainly concerned (whether directly or indirectly) with activities to which sub-paragraph (3) applies.

(3) This sub-paragraph applies to activities which are—

(a) listed regulated activities, or

(b) activities which are not listed regulated activities but consist of the lending of money or of dealing in currency or commodities as principal.

(4) “Listed regulated activity” means an activity which is a regulated activity for the purposes of FISMA 2000 by virtue of any of the following provisions of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544)—

(a) article 5 (accepting deposits),

(b) article 14 (dealing in investments as principal),

(d) article 25 (arranging deals in investments),

(e) article 40 (safeguarding and administering investments),

(f) article 53 (advising on investments), and

(g) article 61 (entering into regulated mortgage contracts).

(5) But an activity is not a listed regulated activity in relation to an employee of a taxable company if—

(a) the taxable company is an insurance company, or a member of the same group as an insurance company, and the activity is carried on wholly on behalf of the insurance company, or

(b) it—

(i) is either of the activities described in the provisions mentioned in sub-paragraph (4)(c) and (d), and

(ii) is carried on as part of, or wholly in support of, activities of the taxable company, or of a company which is a member of the same group as the taxable company, and the activities consist of acting as discretionary investment manager for clients none of which is a linked entity.

(6) An employee of a taxable company who spends no more than 60 days in the United Kingdom in the tax year 2009-10 is to be treated as not being a relevant banking employee of the taxable company.

(7) In determining for the purposes of sub-paragraph (6) whether an individual spends no more than 60 days in the United Kingdom treat a day as a day spent by the individual in the United Kingdom if (and only if) the individual is present in the United Kingdom at the end of the day.

(8) But in determining that issue for those purposes do not treat as a day spent by the individual in the United Kingdom any day on which the individual arrives in the United Kingdom as a passenger if—

(a) the individual departs from the United Kingdom on the next day, and

(b) during the time between arrival and departure the individual does not engage in activities which are to a substantial extent unrelated to the individual's passage through the United Kingdom.

Multiple employments

10

(1) The threshold of £25,000 in paragraph 1(3) applies whether or not an employee has more than one employment as a relevant banking employee with a taxable company.

(2) If relevant remuneration is awarded during the chargeable period to or in respect of a relevant banking employee by reason of the employee's employment as such by a number of associated taxable companies, the threshold in paragraph 1(3) in relation to each of the taxable companies is £25,000 divided by the number of the taxable companies.

(3) For this purpose taxable companies are associated if—

(a) one of them is under the control of the other, or

(b) one of them is under the control of a third person who controls or is under the control of the other.

Payments etc to intermediaries

11

(1) This paragraph applies where—

(a) an individual personally performs banking services for a taxable company,

(b) the banking services are provided not under a contract directly between the individual and the taxable company but under arrangements involving any other person (“the intermediary”), and

(c) the circumstances are such that, if the banking services were provided under a contract directly between the taxable company and the individual, the individual would be a relevant banking employee of the taxable company.

(2) The individual is to be regarded as a relevant banking employee of the taxable company.

(3) Anything done by the intermediary in relation to the individual which, if the banking services were provided under a contract directly between the taxable company and the individual, would be regarded as the award of relevant remuneration during the chargeable period to or in respect of the individual (as a relevant banking employee) by reason of the employee's employment as a relevant banking employee is to be so regarded.

(4) “Banking services” means services which are wholly or mainly concerned (whether directly or indirectly) with activities which are activities to which paragraph 9(3) applies.

Arrangements for future payments etc

12

(1) This paragraph applies where—

(a) arrangements are made during the chargeable period by reason of an employee's employment as a relevant banking employee of a taxable company,

(b) the arrangements make provision under which money may be paid, or any money's worth or other benefit provided, to or in respect of the employee in accordance with the arrangements, and

(c) were the money so paid, or the money's worth or other benefit so provided, during the chargeable period, it would be relevant remuneration awarded to or in respect of the employee during the chargeable period.

(2) The making of the arrangements is to be regarded as the awarding of relevant remuneration to or in respect of the relevant banking employee by reason of the employment; and the amount of the relevant remuneration is to regarded as the amount of any money which it is reasonable to assume will be paid, and any money's worth or other benefit which it is reasonable to assume will be provided, as mentioned in sub-paragraph (1).

Loans

13

(1) This paragraph applies where—

(a) at any time during the chargeable period a relevant loan is provided to or in respect of a relevant banking employee of a taxable company by reason of the employee's employment as a relevant banking employee otherwise than pursuant to a contractual obligation arising before the chargeable period, or

(b) at any time during the chargeable period there arises a contractual obligation to provide a relevant loan to or in respect of the employee by reason of the employee's employment as a relevant banking employee of the taxable company.

(2) A loan is a “relevant” loan if the main purpose, or one of the main purposes, of providing it, or undertaking to provide it, is the reduction or elimination of a liability to bank payroll tax or any other tax or national insurance contributions.

(3) The loan is to be regarded as relevant remuneration awarded during the chargeable period to or in respect of the relevant banking employee by reason of the employee's employment as a relevant banking employee; and the amount of the relevant remuneration is to be regarded as the amount which is loaned or (where the amount of the loan is not fixed) the amount which it is reasonable to assume will be loaned.

(4) A contractual obligation to provide a relevant loan is taken to arise for the purposes of this paragraph even if provision of it is dependent on compliance by the relevant banking employee with any conditions.

Anti-avoidance

14

(1) This paragraph applies where—

(a) relevant arrangements are entered into by one or more persons during the chargeable period, and

(b) the main purpose, or one of the main purposes, of the person, or any of the persons, in entering into the relevant arrangements is a relevant tax avoidance purpose.

(2) “Relevant arrangements” means arrangements involving either or both of the following—

(a) the making of a payment of money, or the provision of any money's worth or other benefit, otherwise than during the chargeable period, and

(b) the giving otherwise than in the form of relevant remuneration of any reward which equates in substance to relevant remuneration.

(3) A “relevant tax avoidance purpose” is the reduction or elimination of a liability to bank payroll tax which would exist if—

(a) in a case within paragraph (a) of sub-paragraph (2), the money were paid, or the money's worth or other benefit provided, during the chargeable period, or

(b) in a case within paragraph (b) of that sub-paragraph, the reward were given in the form of relevant remuneration.

(4) Liability to bank payroll tax is to be determined as it would have been if—

(a) in a case within paragraph (a) of sub-paragraph (2), the money were paid, or the money's worth or other benefit provided, during the chargeable period, or

(b) in a case within paragraph (b) of that sub-paragraph, the reward were given in the form of relevant remuneration.

No deduction in computing profits

15

No amount of bank payroll tax is to be taken into account in calculating profits or losses for the purposes of income tax or corporation tax.

Part 2 — Collection and management of tax

Responsibility for collection and management

16

The Commissioners are responsible for the collection and management of bank payroll tax.

Due date for payment

17

Bank payroll tax is payable by taxable companies on or before 31 August 2010.

Obligation to deliver return

18

(1) In order to establish the amount of bank payroll tax payable by it, every taxable company must deliver a return to HMRC.

(2) The return must be delivered on or before 31 August 2010.

(3) A return under this paragraph is referred to as a bank payroll tax return.

Content etc of return

19

(1) HMRC may publish requirements as to—

(a) the information to be contained in bank payroll tax returns,

(b) the form in which they must be made,

(d) the documents to be delivered with them.

(2) A bank payroll tax return must include—

(a) an assessment (a “self-assessment”) of the amount of bank payroll tax payable by the taxable company on the basis of the information contained in it, and

(b) a declaration by the person making it that, to the best of that person's knowledge, it is correct and complete.

Failure to include self-assessment

20

(1) If a taxable company delivers a bank payroll tax return but fails to include a self-assessment, HMRC may make the assessment on the company's behalf on the basis of the information contained in it.

(2) The assessment is treated for the purposes of this Schedule as a self-assessment and as included in the return.

Amendment of return by company

21

(1) A taxable company may amend its bank payroll tax return.

(2) An amendment under this paragraph is made by notice to HMRC in such form, and accompanied by such information, as HMRC may reasonably require.

(3) No such amendment may be made after 31 August 2011.

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